Quarterly Report
BIM & LOCFUND
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2020 was marked by the COVID-19 pandemic, which negatively affected the performance of the economies in the region. This crisis initially affected the microfinance industry. However, it began a recovery process at the end of 2020. Despite this negative context, Locfund II was able to achieve a positive performance.
MFIs response to the crisis was positive. Portfolio quality indicators of the fund remained stable without negative effects. The exposure in MFIs with rescheduled loans decreased by USD 1.6MM between March and December. Consequently, 8 out of 12 MFIs resumed payments during the year. In addition, loans that are still in grace period, are making interest payments.
During 2020, Locfund II paid USD 24.9 MM to its Senior Lenders according to each Loan Agreement. In addition, the fund has already distributed USD 1.5MM to its equity investors in January 2021.
Due to the pandemic and the Economies recessions, the volatility of local currencies in the region led to devaluations in most countries. The impact on Locfund is mitigated by the manager’s strategy of increasing the exposure in dollarized and pegged regimes reducing the FX risk for the fund. During Q4 a recovery in LAC local currencies was observed which allowed the fund to recover FX results by USD 643K. Less volatility is expected in 2021.
Locfund II remains with an adequate performance due to its proactive strategy that allowed to maintain portfolio quality indicators, together with a positive financial income. These mentioned factors plus the FX recovery, allowed the fund to reach USD 1.5MM profit by 2020.
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LOCFUND II L.P. offers local currency denominated debt instruments and targeted credit enhancement financial instruments to microfinance institutions (regulated or non-regulated), microfinance banks, institutional investors, cooperatives and small business banks, which facilitate funding to small and micro enterprises in Latin America and The Caribbean.
The fund also provides support for development activities to selected microfinance institutions and stimulates access to local securities markets for fixed income instruments issued by microfinance institutions.
The fund is managed by BIM Ltd.
LOCFUND II L.P. has eight equity inverstors which are: Multilateral Investment Fund, FMO, Norfund, BIO, Hyos Invest Holding AG, SIFEM, Panamerican Investments S.A. and BIM Microfinance II.
| Variable | Total |
|---|---|
| Cash and cash equivalent | 4,246,689 |
| Portfolio | 55,805,038 |
| Capital Markets | 3,728,972 |
| Loans Receivable | 48,283,380 |
| Promissory Notes | 3,792,686 |
| Hedged Assets | 0 |
| Total Assets | 59,976,710 |
| Long Term Liabilities | 0 |
| Short Term Liabilities | 19,656,806 |
| Total Liabilities | 19,656,806 |
| Capital | 31,100,000 |
| Reserve for Currency Loss | 352,757 |
| Total Equity | 40,319,902 |
| Variable | December | Total |
|---|---|---|
| Loans Interests | 399,171 | 6,225,711 |
| Total Income | 399,171 | 6,225,711 |
| Management Fees | -86,950 | -1,203,992 |
| Senior Loans Interests | -82,186 | -1,786,077 |
| Others | 0 | -5,500 |
| Total Expenses | -179,332 | -3,132,520 |
| Profit/Loss before provisions | 219,840 | 3,093,197 |
| Bad Loans Provisions | 30,403 | -205,826 |
| TSF Expenses | -30,097 | -134,063 |
| TSF Income | 30,097 | 134,063 |
| Profit/Loss after provisions | 250,242 | 2,887,369 |
| Exchange Rate Difference | 205,571 | -1,422,901 |
| Profit/Loss after FX | 455,813 | 1,464,467 |
During 2020, 25 activities were approved by the donors committee, with estimated approved budget of USD 246K that corresponds to the following subcomponents: 44% in digital transformation, 38% in capacity building and 18% ESG. 8 activities have been already completed, benefiting 7 MFIs from 5 countries, 95 staff member were trained (23% female). Additionally, 17 consultancies are still in process. One of these is a SPI4 program aimed to train, accompany and monitor the institution’s staff in filling out the SPI4 tool, expecting to benefit at least 15 Locfund’s clients.
New bond issuances from clients in Colombia, Honduras and Guatemala are being postponed as a consequence of the COVID-19 impact and will be resume during the next year. Locfund II is not able to join tis efforts, but it is expected that Locfund Next will take the lead.
Potential secondary market transactions in El Salvador and Ecuador are expected to take place during the year.
| Variable | January | February | March | April | May | June | July | August | September | October | November | December |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Assets | 84,566,136 | 84,566,927 | 82,721,588 | 83,445,525 | 71,372,014 | 71,330,387 | 71,918,504 | 72,244,001 | 69,523,519 | 69,637,399 | 58,707,784 | 59,976,710 |
| Cash and cash equivalent | 5,688,535 | 5,999,822 | 8,774,368 | 10,793,920 | 830,034 | 2,526,032 | 4,367,650 | 6,505,332 | 8,406,741 | 10,724,344 | 1,044,205 | 4,246,689 |
| BCP Miami | 5,593,424 | 5,926,296 | 8,676,469 | 10,636,071 | 672,185 | 2,368,183 | 4,236,148 | 6,397,050 | 8,309,946 | 10,627,848 | 956,874 | 4,190,051 |
| BCP Miami - Restricted Funds TSF | 95,111 | 73,526 | 97,899 | 157,849 | 157,849 | 157,849 | 131,502 | 108,282 | 96,795 | 96,496 | 87,331 | 56,638 |
| Additional Acces Fee - MFX | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 |
| Interest - MFX | 184 | 358 | 392 | 317 | 239 | 169 | 99 | 29 | 0 | 0 | 0 | 0 |
| Portfolio | 75,057,887 | 74,856,073 | 71,523,704 | 69,969,374 | 68,431,453 | 66,635,725 | 65,115,431 | 63,383,517 | 61,324,889 | 59,019,672 | 57,680,618 | 55,805,038 |
| Capital Markets | 4,227,681 | 4,252,183 | 4,062,076 | 4,066,889 | 4,073,191 | 3,957,311 | 3,963,029 | 3,968,403 | 3,837,096 | 3,841,894 | 3,845,871 | 3,728,972 |
| Loans Receivable | 64,307,732 | 62,838,199 | 59,871,457 | 58,554,713 | 58,188,681 | 57,341,880 | 55,954,170 | 54,185,264 | 52,438,676 | 50,268,898 | 48,894,722 | 48,283,380 |
| Promissory Notes | 6,522,474 | 7,765,691 | 7,590,171 | 7,347,772 | 6,169,581 | 5,336,534 | 5,198,232 | 5,229,850 | 5,049,117 | 4,908,880 | 4,940,025 | 3,792,686 |
| Hedged Assets | 3,700,000 | 3,700,000 | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | 0 | 0 | 0 | 0 |
| Hedged assets - Honduras | 1,200,000 | 1,200,000 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Hedged assets - Nicaragua | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | 2,500,000 | 0 | 0 | 0 | 0 |
| Impairment Provision Reserve | -329,358 | -330,859 | -304,167 | -244,569 | -709,378 | -550,223 | -472,491 | -468,216 | -437,579 | -509,639 | -332,563 | -302,160 |
| Management Fee paid in advance | 230,548 | 124,528 | 11,631 | 212,164 | 106,693 | 7,052 | 197,528 | 99,271 | 6,825 | 181,812 | 95,740 | 8,790 |
| D&O Insurance paid in advance | 7,093 | 5,911 | 4,729 | 3,547 | 2,364 | 1,182 | 0 | 13,945 | 12,677 | 11,410 | 10,142 | 8,874 |
| Others | 11,247 | 11,094 | 10,931 | 10,772 | 10,609 | 10,450 | 10,287 | 10,123 | 9,966 | 9,800 | 9,642 | 9,479 |
| Variable | January | February | March | April | May | June | July | August | September | October | November | December |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| LIABILITIES | 45,654,238 | 45,793,415 | 44,872,594 | 45,155,527 | 33,014,635 | 32,867,974 | 32,987,083 | 33,073,429 | 30,371,321 | 30,489,144 | 18,843,694 | 19,656,806 |
| Short Term Liabilities | 27,687,022 | 27,824,569 | 26,902,005 | 27,183,252 | 15,040,617 | 14,892,269 | 24,248,359 | 24,333,834 | 21,630,883 | 21,748,336 | 15,101,039 | 19,656,806 |
| Accounts Payable | 63,739 | 35,448 | 128,291 | 153,405 | 37,021 | 28,088 | 49,073 | 34,151 | 36,899 | 23,461 | 32,214 | 1,556,810 |
| FUNDA-PRO | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1,503,383 |
| Advisory Committe Meetings Costs | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2,100 | 2,100 |
| Capital and Interest received in advance | 32,094 | 9,049 | 61,478 | 130,684 | 9,149 | 0 | 18,670 | 0 | 0 | 0 | 0 | 26,179 |
| Commitment Fees | 4,361 | 4,361 | 4,361 | 4,361 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Credit Committe Meetings Costs | 0 | 0 | 0 | 750 | 750 | 0 | 1,500 | 1,500 | 500 | 500 | 0 | 0 |
| External Auditors | 21,784 | 16,538 | 15,790 | 15,041 | 18,789 | 22,536 | 26,284 | 30,032 | 33,780 | 19,534 | 23,281 | 18,036 |
| Legal Services | 5,500 | 5,500 | 5,500 | 2,569 | 8,333 | 5,552 | 2,619 | 2,619 | 2,619 | 3,427 | 6,833 | 7,112 |
| Others | 0 | 0 | 41,162 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Hedged Liabilities | 4,114,503 | 4,105,500 | 2,855,751 | 2,848,840 | 2,841,721 | 2,834,844 | 2,827,754 | 2,820,683 | 0 | 0 | 0 | 0 |
| Hedged liabilities - Honduras | 1,244,878 | 1,242,584 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Hedged liabilities - Nicaragua | 2,869,625 | 2,862,916 | 2,855,751 | 2,848,840 | 2,841,721 | 2,834,844 | 2,827,754 | 2,820,683 | 0 | 0 | 0 | 0 |
| Senior Loans | 23,413,669 | 23,610,095 | 23,820,064 | 24,023,158 | 12,004,026 | 11,871,488 | 21,240,030 | 21,370,718 | 21,497,189 | 21,628,379 | 14,981,494 | 18,043,358 |
| BIO | 505,167 | 510,000 | 515,167 | 520,167 | 525,333 | 500,000 | 1,005,167 | 1,010,333 | 1,015,333 | 1,020,500 | 1,025,500 | 500,000 |
| HYOS | 7,750 | 15,000 | 22,750 | 30,250 | 38,000 | 0 | 757,750 | 765,500 | 773,000 | 780,750 | 788,250 | 1,500,000 |
| IDB | 22,785,008 | 22,892,349 | 23,007,092 | 23,118,134 | 11,273,376 | 11,317,205 | 11,362,495 | 11,407,786 | 11,451,614 | 11,496,905 | 0 | 0 |
| IIC | 97,411 | 143,472 | 192,708 | 240,253 | 19,889 | 57,182 | 5,095,718 | 5,134,254 | 5,171,547 | 5,210,082 | 10,015,755 | 10,050,642 |
| MIF | 17,000 | 26,667 | 37,000 | 47,000 | 57,333 | 6,333 | 1,016,667 | 1,027,000 | 1,037,000 | 1,047,334 | 1,057,334 | 2,006,667 |
| SIFEM | 20,667 | 40,000 | 60,667 | 80,667 | 101,334 | 0 | 2,020,667 | 2,041,334 | 2,061,334 | 2,082,000 | 2,102,000 | 4,000,000 |
| Deferred financing costs | -19,334 | -17,393 | -15,320 | -13,313 | -11,239 | -9,232 | -18,434 | -15,489 | -12,639 | -9,192 | -7,345 | -13,951 |
| TSF (Donors) | 95,111 | 73,526 | 97,899 | 157,849 | 157,849 | 157,849 | 131,502 | 108,282 | 96,795 | 96,496 | 87,331 | 56,638 |
| TSF (Donors) | 95,111 | 73,526 | 97,899 | 157,849 | 157,849 | 157,849 | 131,502 | 108,282 | 96,795 | 96,496 | 87,331 | 56,638 |
| Long Term Liabilities | 17,967,216 | 17,968,846 | 17,970,589 | 17,972,275 | 17,974,018 | 17,975,705 | 8,738,724 | 8,739,595 | 8,740,438 | 8,740,808 | 3,742,655 | 0 |
| Senior Loans | 17,967,216 | 17,968,846 | 17,970,589 | 17,972,275 | 17,974,018 | 17,975,705 | 8,738,724 | 8,739,595 | 8,740,438 | 8,740,808 | 3,742,655 | 0 |
| BIO | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 500,000 | 0 | 0 | 0 | 0 | 0 | 0 |
| HYOS | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 750,000 | 750,000 | 750,000 | 750,000 | 750,000 | 0 |
| IIC | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 0 | 0 |
| MIF | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 0 |
| SIFEM | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | 0 |
| Deferred financing costs | -32,784 | -31,154 | -29,411 | -27,725 | -25,982 | -24,295 | -11,276 | -10,405 | -9,562 | -9,192 | -7,345 | 0 |
| Variable | January | February | March | April | May | June | July | August | September | October | November | December |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EQUITY | 38,911,900 | 38,773,506 | 37,848,991 | 38,289,995 | 38,357,376 | 38,462,417 | 38,931,416 | 39,170,574 | 39,152,198 | 39,148,260 | 39,864,088 | 40,319,902 |
| Capital | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 | 31,100,000 |
| BIM Microfinance | 600,000 | 600,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 |
| BIO | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 |
| FMO | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 |
| Hyos Invest Holding AG | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 |
| MIF | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 |
| Norfund | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 |
| PISA S.A. | 0 | 0 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 |
| SIFEM | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
| BIM Microfinance | 600,000 | 600,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 | 50,000 |
| BIO | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 |
| FMO | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 |
| Hyos Invest Holding AG | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 | 1,500,000 |
| MIF | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 |
| Norfund | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 | 8,000,000 |
| PISA S.A. | 0 | 0 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 | 550,000 |
| SIFEM | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
| Accumulated Results | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 | 7,187,347 |
| Reserve for Currency Loss | 574,803 | 565,434 | 523,400 | 529,253 | 552,435 | 553,276 | 530,701 | 518,577 | 487,982 | 466,405 | 361,158 | 352,757 |
| Accumulated Reserve | 568,087 | 568,087 | 568,087 | 568,087 | 568,087 | 568,087 | 568,087 | 568,087 | 568,087 | 568,087 | 568,087 | 568,087 |
| Reserve of the Period | 6,716 | -2,653 | -44,687 | -38,834 | -15,652 | -14,811 | -37,386 | -49,510 | -80,105 | -101,682 | -206,929 | -215,330 |
| Period Profit/Loss Net of FX Reserves | 49,750 | -79,275 | -961,756 | -526,605 | -482,406 | -378,206 | 113,368 | 364,650 | 376,869 | 394,508 | 1,215,583 | 1,679,798 |
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